New Delhi: Seeking to mend their frail ties, India and Nepal on Monday held wide-ranging talks and decided to step up cooperation in key areas of security, energy and water resources ahead of Nepal Prime Minister Prachanda's visit, which is being seen as an opportunity by Indian side to discuss issues of mutual interest and concern.

During the talks between External Affairs Minister Sushma Swaraj and her Nepalese counterpart Prakash Sharan Mahat, the two sides also discussed the upcoming visit of Prachanda from 15 September. This will be his first foreign trip after assuming office last month.

"Both the Ministers held wide ranging talks on issues of mutual interest, and covering the entire gamut of bilateral relations, including the upcoming high-level exchanges between the two countries."

"Both sides reiterated their commitment to further strengthen and deepen age-old, close and friendly ties in diverse sectors such as trade and mutual investments, defence and security, economic and development partnership, infrastructure development, energy and water resources, and forging connectivities to facilitate movement of goods and services, people and ideas," External Affairs Ministry said after the meeting.

The Ministry also said that the "visit of the Prime Minister of Nepal will provide an opportunity for both sides to discuss issues of mutual interest and concern, as well as seek ways to strengthen the age old, close and friendly ties between the two countries in diverse sectors."

During his four-day visit, Prachanda will hold talks with his Indian counterpart Narendra Modi on important bilateral and regional issues.

Nepal-India ties had soured after months-long border blockade last year by ethnic minority protesters over the new Constitution which they claimed marginalised them.

Kathmandu had then accused India of imposing an "unofficial blockade" on the landlocked nation in support of the Madhesis, who share close cultural, linguistic and family links with Indians across the border.

Even after the normalisation of supply of goods from India, the bilateral ties continued to reel under strain after former Nepal Prime Minister K P Oli accused India of toppling his government and creating political instability in his country, a charge that was categorically denied by India.